They do not define their target by segmenting ages and lifestyles therefore giving them a much broader market and an advantage over traditional retailers. Focusing on the Zara website alone, when you first have a glance, it has a simplistic layout and uses neutral colours which gives it that elegant and smart look.
However, navigation on the website is not easy and in some what way frustrating. The irritation arises from the aesthetics of the web page. For instance, when you want to view an item, the image is not shown in full forcing you have to scroll down in order to access the rest of the image as evident in the image below.
All three webpages are targeted to similar target audiences. Whereas, Zara tend to focus on images primarily related to fashion, targeting users who are fashion conscious, not necessarily related to the wider audience and users who are less fashion conscious.
The design team structure is very flat and focuses on careful interpretation of catwalk trends that are suitable for the mass market — the Zara customer. The design and product development teams, who are based in Spain, work closely to produce 1, new styles every month. Zara has no chief designer. All its designers are given unparalleled independence in approving products and campaigns, based on daily data feeds indicating which styles are popular.
Due to the unwavering focus on the customer, the entire business model is designed in such a way that the pattern of needs for the finished goods dictate the terms of the production process to follow, instead of having the raw materials determine the nature of the production process — something that is very rare in multinational companies of similar scale.
Zara has used almost a zero advertising and endorsement policy throughout its entire existence, preferring to invest a percentage of its revenues in opening new stores instead.
It spends a meager 0. This is indeed the mark of a truly successful brand where customers appreciate and desire the brand, which is over and above product level benefits but strongly driven by the brand experience. Instead of advertising, Zara uses its store location and store displays as key elements of its marketing strategy.
By choosing to be in the most prominent locations in a city, Zara ensures very high customer traffic for its stores. Its window displays, which showcase the most outstanding pieces in the collection, are also a powerful communication tool designed by a specialized team.
A lot of time and effort is spent designing the window displays to be artistic and attention grabbing. To tap into the emerging e-commerce trend, Zara launched its online boutique in September More recently in March , the brand launched online in Australia and New Zealand. Today, its online store is available in 66 countries. As a fast fashion retailer, Zara is definitely aware of the power of e-commerce and has built up a successful online presence and high-quality customer experience.
Inditex has announced that it will be closing between 1, to 1, stores worldwide, focusing on smaller ones in Asia and Europe. Amancio Ortega plans to spend USD 1. To achieve this goal, Zara will need to think of new ways to engage its customers digitally, not just through its online store, but through online communities and social media.
Mobile commerce: Zara woke up late to the potential of mobile commerce and needs to catch up fast with competitors. Different forms of market analysis strongly point towards a scenario wherein spends on mobile commerce will overtake desktop based ecommerce by Price is not an advantage anymore: Offering the latest fashion lines at affordable prices continues to be a strategic advantage for Zara, but cannot continue to be the only one.
Across the world, and closer to home in Europe, competitors are cutting prices and refining their business models to cut the competitive advantage that Zara has. Again in its home market, it now faces increasing competition from brands like Mango, which cut prices and started focusing on fashion segments in which Zara enjoyed popularity. Also with the rise of e- and m-commerce, the number of indirect competitors has mushroomed. We now have online fashion aggregators that bring in multiple brands under one single online platform and cut through borders and price segments.
For Zara to effectively compete and maintain its strategic advantage, the focus needs to shift away from price but towards quality.
Even today the Zara brand enjoys high levels of appeal, which is evident by the serpentine queues outside its stores when it launches in new markets.
There is a need for Zara to start investing in building a strong brand positioning and aggressively communicate it. Additionally, Zara needs to adopt, imbibe and leverage social media and digital platforms in its advertising and communication strategies deeper going forward. Need for marketing strategy to evolve: As discussed above, Zara does not engage in advertising and instead uses its store locations as a marketing strategy. However, brand communication is crucial in attracting new customers to the brand to support its growth.
Without advertisements, Zara relies heavily on word of mouth or social media. This causes the perception of potential customers towards Zara to be heavily shaped by family and friends, which may not be accurate.
Its videos on YouTube are also seeing very low viewership in comparison with its follower count, which is not ideal as videos are a powerful medium for brands in the fashion industry.
This is a gap that Zara needs to plug immediately as the reach and impact of social media marketing gets stronger. Family business planning and succession: With various technological and business disruptions in the past decade, leadership in the 21st century will be influenced by constant change, geopolitical volatility, and economic and political uncertainty.
Most fashion trends often start unexpectedly, originate from uncommon places and grow out of nowhere. With reference to the pink scarf trend mentioned above, it could have been that Hollywood actress Scarlett Johansson had worn a pink scarf to a charity gala the evening before in Los Angeles, or golf star Michelle Wie had showcased a pink scarf at a celebrity tournament in Asia.
The fact that Zara was able to quickly jump on to this trend and provide hundreds of customers with the pink scarves they desperately wanted to buy. In a world swamped with Big Data, and yet more collected at an even more rapid pace than before, brands still need to be careful and observant.
Big Data does not provide answers to all business challenges, and it may be too hyped to be considered as the Holy Grail. Asian Brand Strategy provides key insights and knowledge about the rising Asian brands incl. Download sample chapter. Martin Roll enables global clients to deliver business impact and drive long-term value. Learn more about our services and how your company can get ahead.
The other fashion brands in the Inditex portfolio are: Zara Home: Home goods and decoration objects founded in The Zara brand communication strategy Zara has used almost a zero advertising and endorsement policy throughout its entire existence, preferring to invest a percentage of its revenues in opening new stores instead.
So, why not consult your customers for a start? Zara always does. Learn More. This site uses cookies to enhance your experience More info Accept. Today, value is measured beyond price, but also in time and convenience. Zara has a deep understanding of the entire value proposition it exchanges with the customers.
Its fast-fashion deliverable is available in the quantity, format and time in which the customer needs the product.
That translates into great value. These brand loyalists are also less price sensitive. Zara masters the concept of exchange as it is not the cheapest in the fast-fashion arena, but it consistently delivers branded value of trend-right product at appealing prices. By making the brand experience meaningful and the exchange valuable, Zara taps the potential of its customers to evangelize the brand. Rather than push marketing out, Zara pulls customers in, cultivates them as brand influencers to improve operations, services and products and stimulates them to spread the word.
These loyalitsts become brand evangelists who share excitement about the brand with their networks. Zara, for example, has over 25 million Facebook followers, 16 million on Instagram and over one million in Twitter. This data is used to improve various aspects of the business from product offerings to service enhancements.
Personal commerce is the every place where the customers are, rather than only in the physical place the brand is present. This is the new distribution model for retailers today: Delivering the brand experience and products when and where the customer demands it. Zara does that for them. It currently operates in 2, stores across 93 markets and 39 online markets. The flagship locations are located in the most critical markets that appeal to their most loyal shopper.
Zara has cultivated unique advantages with its 4Es approach to marketing by focusing on experience, exchange, evangelism and every place strategies for the customer, rather than the old product, price, promotion and place concept focused on the brand.
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